Blue Gold Secures $140 Million to Restart Bogoso-Prestea Gold Mine

 

Blue Gold Secures $140 Million to Restart Bogoso-Prestea Gold Mine

Blue Gold, Bogoso-Prestea Mine - Blue Gold Limited, a next-generation gold development and technology company, has announced that it has secured another $65 million of committed funding available to finance the restart of the Bogoso and Prestea gold mine.

This brings the total committed capital the Nasdaq-listed company has secured to $140 million.

The funding, which comes from a new institutional investor, is structured as a secured loan for the exclusive purpose of financing the restart of the 5.1m oz Bogoso and Prestea gold mine in Ghana.

The funds are being held in escrow with lawyers, conditional on the resolution of the lease dispute with the government of Ghana.

Commenting on the new funding, the Chief Executive Officer, Andrew Cavaghan, said, “This funding, along with the amount that is already committed, clearly evidences our capacity to invest and restart in the mine to bring it back into full production.”

“The former Ghana administration took steps in September 2024 to prevent us from investing funds secured for the restart of the mine by wrongfully terminating the Bogoso and Prestea mining lease.

We immediately disputed the legality of this action, and the matter is now in international arbitration.”

“We are confident to reach a resolution of this dispute, including settlement, to ensure that this important mine is brought back into production as quickly as possible.”

Operating the Bogoso and Prestea mine ties in with the company’s strategy to tokenise its gold production to create the world’s first global, gold-backed currency, which it is preparing to launch through its recently launched Digital Division.

Blue Gold Limited (Nasdaq: BGL) focuses on acquiring and aggregating high-potential mining assets across strategic global jurisdictions.

The company’s mission is to unlock untapped value in the gold sector by combining disciplined resource acquisition with innovative monetisation models, including asset-backed digital instruments.

Blue Gold is committed to responsible development, operational transparency, and leveraging modern financial technologies to redefine how gold is produced, accessed and owned in the 21st century.

The company prioritises growth, sustainable development and transparency in all our business practices.

“We believe that our commitment to responsible mining will enable us to create value for our shareholders while minimising our environmental footprint,” Mr Cavaghan said.

Background

Future Global Resources (FGR) acquired the Bogoso Prestea Mine on October 21, 2020, from Golden Star Resources, which had operated the mine since 1999.

FGR inherited the assets and liabilities of Golden Star Bogoso Prestea, including a debt of over $60 million.

The underground operations of the mine, considered to be one of the largest in the country, at the time of the acquisition, were equally not in the best of shape, and it was making significant losses.

Committed to turning the mine around, FGR instituted a plan to inject capital into the operations, restructure the underground operations and bring on board experienced manpower.

Severance

However, soon after FGR assumed operations, the employees resorted to numerous industrial actions to demand the payment of their severance packages, a package which should have been settled by Golden Star Resources under Ghanaian labour law.

After several industrial actions and production stoppages, FGR decided to engage the workers on the matter to seek an amicable settlement.

The company agreed to settle the accrued redundancy benefits in three instalments of 20 per cent on October 31, 2021; 40 per cent on October 31, 2022, and 40 per cent on October 31, 2023.

Since the first payment, subsequent ones could not be fully honoured due to operational and cash flow challenges. The sustained employee agitations disrupted production and made matters worse.

The employee, the company said, called on the Minister of Lands and Natural Resources to withdraw the mining leases of the company.

The challenges prompted shareholders to seek approval from the Minister of Lands and Natural Resources to restructure the business to ensure operational efficiency, redeem the huge debt burden and list the company on the Nasdaq, a New York-based stock exchange.

The company secured financial backing, formed a new special purpose vehicle, Blue Gold Bogoso Prestea Ltd, to operate the mine, which is also listed on the Nasdaq, with a market capital of $ $300 million.

After submitting a detailed restructuring plan to the Ministry of Lands and the regular, Minerals Commission on January 30, 2024, the company was granted a conditional approval with specific deliverables over 120 days.

At the end of the 120 days, Blue Gold said it showed proof of financial capacity and was ready to immediately restart the mine and repay all the debts, but the Environmental

Protection Authority (EPA) and the Minerals Commission did not issue the necessary permits required to restart.

Instead, the mining lease was terminated and subsequently revoked, preventing funding from being deployed and the mine from restarting.

The company raised an objection and resorted to local courts for remedy, but unsatisfied, FGR/Blue Gold sought refuge in an international arbitration, demanding to be paid $1 billion for the wrongful revocation of its mining lease.

via